Reviving Pumped Storage

Operationalising PSPs to promote grid stability

The short-term power market has witnessed significant growth in the past few years. Against less than a 0.5 per cent share in the total power generation a decade ago, the share of power trading touched 4.4 per cent in 2009-10. More than 30 billion units (BUs) were traded in the short-term market in 2009, taking the total size of the market to Rs 190.2 billion. The segment is likely to attract further interest in the next two to three years as merchant capacity that is currently under construction becomes operational and participates in the short-term market.

India is proactively working towards achieving the ambitious 175 GW by 2022 renewable energy target, which is over three times the current installed capacity of 58 GW. Wind and solar plants are subject to daily cyclic natural fluctuations as well as seasonal fluctuations, which lead to grid instability. To be able to smoothly integrate the planned renewable energy capacity, the grid must be prepared to provide quick response to handle huge amounts of variable power. This emphasises the need for energy storage as it can ease the introduction of very high shares of renewable energy, improve security and efficiency of electricity transmission and distribution, stabilise market prices and also ensure greater security of energy supply. World over, while new storage technologies are being tested, hydropower pumped storage plants (PSPs) continue to be the oldest and largest energy storage technology available for utilities.

PSPs offer the unique advantage of acting as a load in the pump mode by raising water to the upper reservoir during times of surplus power and running in generating mode during power-deficit situations in the grid. It provides other advantages like large grid storage and long discharge time, high ramp rate, voltage support, grid stability, black-start facility, balancing the grid for demand-driven or generation-driven variations and improving the overall economy of power system operation, besides increasing the capacity utilisation of thermal, solar and wind stations. PSPs are the only long-term, technically proven solution without any restriction of unit capacity. They are cost-effective, efficient, have operationally flexible energy storage on a large scale and available on short notice. On the flip side, PSPs are site specific, expensive, entail long construction times, and make obtaining environmental clearances difficult.

At present, India has nine PSPs with an installed capacity of 4,786 MW. Of these, only five PSPs aggregating 2,600 MW are working in pumping mode. Recognising the importance of PSPs to support the integration of renewable energy, the Central Electricity Authority (CEA), in June 2017, held a meeting with the concerned stakeholders for operationalisation of existing PSPs. These stakeholders highlighted the existing status of PSPs in the country and the issues and challenges, as well as made recommendations to resolve them. Reviving PSPs is complementary to the larger effort of optimising the existing 45 GW hydropower capacity in the country to provide peaking and other services to the grid. To this end, the Power System Operation Corporation of India (POSOCO) has undertaken a study on “Operational Analysis for Optimisation of Hydro Resources and Facilitating Renewable Integration in India” (see box).

The country’s first PSP, Nagarjunasagar in Telangana, was commissioned during the 1980-85 period. However, it is not operating in the pumping mode as the tail pool dam is not yet operational. Same is the case with Sardar Sarovar in Gujarat and Panchet Hill in West Bengal. The fourth PSP that is not operating in the pumping mode due to vibration problems is Kadana Stages I and II in Gujarat. Bharat Heavy Electricals Limited (BHEL) has been appointed to study and rectify the issue at the Kadana PSP, while Telangana and Andhra Pradesh have to work together to make the tail pool dam operational and resolve issues related to discharge quantum and time duration. The tail pool dam at Sardar Sarovar is under construction and is likely to be completed by October 2018. In the case of Panchet Hill, it has been decided not to operate the project in pumping mode due to land acquisition issues in the lower reservoir.

The CEA has identified a potential of 96,524 MW across 63 schemes for pumped storage operation across the country. This does not include PSPs on small streams/nallahs and schemes that could be taken up on the existing reservoir schemes in operation, where PSPs could be set up by constructing another reservoir upstream or downstream. Regionally, the western region (WR) has the highest PSP potential at 41 per cent or 39,684 MW due to the topographical features with steep gradients of rivers originating from the Western Ghats. The CEA has taken up a basin-wise review, which would be completed in 2019.

Two PSPs are currently under construction – the 1,000 MW Tehri PSP in Uttarakhand and the 80 MW Koyna Left Bank in Maharashtra. They are expected to be commissioned in 2018-19. In addition, a dozen projects aggregating 9,430 MW are at various stages of planning, including survey and investigation (S&I) and preparation of detailed project reports (DPRs) (see table). At a recent meeting, CEA representatives stated that to make PSPs commercially viable there is a need to implement differential tariff for peak hours.

Further, PSPs must be considered as a grid element rather than an energy generation source. Therefore, a market-based mechanism of operation through regulatory treatment will help in improving the commercial viability of PSPs. This will also help in justifying funding support, if any, for operationalising the existing non-operating PSPs and future PSPs from the Power System Development Fund and the National Clean Energy and Environment Fund. It has also recommended that the balancing cost must be shared on a pro rata basis by all states in the region as although renewable energy resources are concentrated in certain states, all the states are required to meet their respective renewable purchase obligations.

Given that hydropower is a state subject, state governments will need to take the initiative to allocate the identified schemes to prospective developers. Further, it would be more cost-effective to locate PSPs where one of the reservoirs is already existing or under construction. Flexible scheduling for PSPs and multipurpose projects must be included in the Indian Electricity Grid Code. It was further pointed out that some of the identified schemes in the WR are located in areas declared as wildlife sanctuaries, which may require the state and central governments to denotify such areas for the development of PSPs.

Going forward, hydropower, particularly PSPs, is expected to play an important role in providing power storage and maintaining grid stability. It is an appropriate time for planning and for regulatory agencies to intervene and take requisite measures to ensure that the available resources are utilitised to their maximum potential in line with the overall objective, given the funding and other constraints associated with new ventures.